Thursday, 29 June: Shares in Sky rose after midday after the UK government announced they would be delaying making a decision over Rupert Murdoch’s 21st Century Fox’s takeover bid for Europe’s biggest broadcaster following raised public interest concerns. UK Culture Secretary Karen Bradley told lawmakers the government is to refer the takeover bid to the competition watchdog, amid concerns over the Murdoch family having increased influence over the UK’s news agenda, continuing to warn “the proposed entity would have the 3rd largest total reach of any news provider – lower only than the BBC and ITN”. 21st Century Fox first agreed to buy the 61% of Sky Murdoch doesn’t already own back in December and although delaying their decision, the UK government said it sees no material issues with regards to broadcasting standards. Fox and Sky have until July 14 to response, at which Bradley will make a final decision on whether to refer the deal. Sky rose more than 3% following the announcement, in what has been described as relief among investors that the deal has at least cleared the “fit-and proper test”, closing +3.29% @988.5p, continuing to trade at a discount to the £10.75 offer.
HSBC were the top winner in London following an upgrade from Morgan Stanley as an analyst commented on ways the bank can deploy excess cash moving forward, with the expectation HSBC is in the top quartile of EU banks for cash returns over the next 3 years. HSBC shares rose as the prospect of a UK interest rate rise got closer, closing the day at the top of the blue chip index with gains of 4.24%.
Sterling continued its rise against the US dollar following Carney’s hawkish comments in Portugal yesterday. The pound moved above $1.30 intra-day after inconsistent messages from bank members over the last couple of weeks. However, yesterday’s comments has made UK investors and markets to look at a greater probability of a possible rate rise in the UK in the second half of 2017. GBP/USD is +0.35% at the time of writing @ $1.2986. GBP/EUR is flat @ €1.1362.
At the close European indices were down with the CAC -1.88%, the DAX -1.89 and the FTSE 100 -0.51%. The FTSE 250 was lower by 0.67%, dragged lower by JD Sports, who lost 8.8% after reporting sales in line with expectations in both store sales and on line, although due to calendar differences, they don’t think like for like comparatives will be truly meaningful till end the first half end.